Going Beyond Formalization: Effective Risk Management in a Medium Company

The present paper represents a preliminary descriptive and interpretive case study on the topic of risk management in SMEs.
The research identifies an Italian medium company, a family business founded in 1940s. This company was chosen as it has been through different generational passages and represents the best example of how the integrated and holistic approach in managing risks is put into practice.
This paper supports the idea that in a medium enterprise (family firm) it is not necessary to formalize the risk management process with written procedures. However, the management or family owners should hold all the information flows, be able to influence the management dynamics and manage all the events in a holistic way.
It is also essential to manage the company in a forward-looking way with an effective planning process. Therefore, it is fundamental that the risk management process coincides with already existing processes and integrates perfectly with the company management.
This paper represents the second step of a huge research project. The research aims to understand whether it is possible to validate a conceptual model that considers a risk approach focusing on decision making, SME entrepreneurship and corporate culture.
Consistency and effectiveness of the proposed risk approach should be further tested and validated with other case studies.
The implications of this research are several: SME owners should consider the uncertainty and challenges from the external environment as opportunities to develop their business; and professionals are fundamental to support SMEs in the business management.